Blockbuster Video - what goes around comes around...
Blockbuster Video is a perfect example of a company that has been mistreating their customers for years....and now is finally paying the price. They are likely going out of business.
For years Blockbuster dominated the video rental space. Their store layout design was superior to their competitors....as was their marketing.
Unfortunately, they chose to ruin their relationship with customers by imposing on them a system of "late fees". I'm sure the late fees looked great on a spreadsheet, as they comprised a good deal of the profit margin enjoyed by Blockbuster.
However, in the long run, it undercut any loyalty or brand affinity that Blockbuster could have created. This is the same affinity or brand loyalty that would serve them well at this time to combat Netflix and direct download competitors such as CinemaNow and Movielink.
The CEO of Blockbuster now agrees that eliminating late fees and restoring good relationships with customers is a move in the right direction.
Unfortunately, it is too little too late. Unless he plans on personally contacting each former customer of Blockbuster to apologize for past behaviors and explain their new approach, their new tact will hit a wall.
The day I found out about Netflix...I signed up for Netflix. A smile ran across my face as I knew this was the beginning of the end for Blockbuster....and had paid my last late fee. My guess is that many others have had the exact same reaction.
It didn't have to be this way.
Why not uses positive reinforcement instead of negative reinforcement?
Why note offer loyal customers the ability to earn rewards based on whether or not they return the video on time...or even early?
Blockbuster could still punish non-loyal customers with late fees. The non-loyal customers are those that cause Blockbuster inventory levels to swell...and thus they should be the ones to pay for it.
Instead, by not differentiating between their best and worst customers, Blockbuster penalized the very customers that kept them in business all these years...and eliminated any chance of customer loyalty.
As a result, they are probably going out of business. Good riddance.
For years Blockbuster dominated the video rental space. Their store layout design was superior to their competitors....as was their marketing.
Unfortunately, they chose to ruin their relationship with customers by imposing on them a system of "late fees". I'm sure the late fees looked great on a spreadsheet, as they comprised a good deal of the profit margin enjoyed by Blockbuster.
However, in the long run, it undercut any loyalty or brand affinity that Blockbuster could have created. This is the same affinity or brand loyalty that would serve them well at this time to combat Netflix and direct download competitors such as CinemaNow and Movielink.
The CEO of Blockbuster now agrees that eliminating late fees and restoring good relationships with customers is a move in the right direction.
Unfortunately, it is too little too late. Unless he plans on personally contacting each former customer of Blockbuster to apologize for past behaviors and explain their new approach, their new tact will hit a wall.
The day I found out about Netflix...I signed up for Netflix. A smile ran across my face as I knew this was the beginning of the end for Blockbuster....and had paid my last late fee. My guess is that many others have had the exact same reaction.
It didn't have to be this way.
Why not uses positive reinforcement instead of negative reinforcement?
Why note offer loyal customers the ability to earn rewards based on whether or not they return the video on time...or even early?
Blockbuster could still punish non-loyal customers with late fees. The non-loyal customers are those that cause Blockbuster inventory levels to swell...and thus they should be the ones to pay for it.
Instead, by not differentiating between their best and worst customers, Blockbuster penalized the very customers that kept them in business all these years...and eliminated any chance of customer loyalty.
As a result, they are probably going out of business. Good riddance.
posted by CyberRead.com at 4:40 PM
1 Comments:
As a former Blockbuster employee, I can honestly say that we were trained to believe: "The customer is always right." When people argued about late fees, nine times out of ten- a manager waived the fee. Over time, however, I guess someone did the math and realized they were losing money. Stricter rules were enforced, and now I can't even get out of a late fee, even when I know the magic words. I too jumped at the chance to have a Netflix account...and I've had 2 DVDs sitting on top of my T.V. for 8 months! I'm a proud member of Netflix with not one late fee!
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